RESIGNATION AGREEMENT
This Resignation Agreement (this "Agreement") is hereby
entered into as of this 1st day of September, 1996 by and between
Span-America Medical Systems, Inc. (the "Company") and Xxxxxxx X.
Xxxxxxxx ("Xxxxxxxx").
WHEREAS Xxxxxxxx was employed by the Company in executive
management positions from 1982 until August 15, 1996;
WHEREAS in consideration of Xxxxxxxx'x leadership and
valuable service to the Company, the Company wishes to provide
appropriately for his separation from employment;
WHEREAS this Agreement has not been agreed upon in an
adversarial context but is entered into for the protection and
benefit of both parties;
NOW THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as
follows:
1. Resignation. Xxxxxxxx resigned as an officer and
director of the Company effective as of August 15, 1996. In
recognition of the deep mutual respect that the Company and
Xxxxxxxx each have for the other, Xxxxxxxx and the Company agree
that neither shall make any derogatory comments or references
with respect to the other and shall strive to be as complimentary
as possible one to the other under the circumstances.
2. Compensation.
(i) The Company shall pay on a monthly basis to Xxxxxxxx an
annual salary of $77,500 for a period of 24 months, commencing
September 1, 1996. Each of such payments shall reflect customary
withholdings.
(ii) Through August 31, 1998, the Company shall continue to
provide Xxxxxxxx with full medical insurance coverage in
accordance with the Company's current plan or as it may be
amended during such period; Xxxxxxxx shall continue as a
participant in the Company's ESOP and 401(k) on the same basis as
he is currently participating in such plans; Xxxxxxxx'x current
life insurance comprising of a split dollar policy and a group
term policy currently in effect shall be continued during such
period and Xxxxxxxx shall be given such options as may be
available to personally take over such policies at the end of
such period; and Xxxxxxxx shall continue as a participant in the
Section 125 Cafeteria Plan.
(iii) For purposes of any stock options held by Xxxxxxxx,
the effective termination date shall be August 31, 1998.
(iv) In the event Xxxxxxxx should die prior to full payment
of the benefits set forth in this item 2, any remaining benefits
due under this paragraph 2 shall be paid to his wife.
(v) The Company agrees to pay up to $10,850 for out
placement services on Xxxxxxxx'x behalf through Xxx X'Xxxxxx with
the Michelin Career Assistance Center, such funds to be paid
directly to Xx. X'Xxxxxx and/or the Michelin Career Assistance
Center.
3. Confidential Material. In addition to, and without
diminishing the effectiveness of any statutory or common law
requirements imposed on employees and former employees with
respect to confidentiality, proprietary information and similar
matters, Xxxxxxxx agrees at all times hereafter, except with the
written consent of the Company, he shall not use Confidential
Information and shall not disclose the Confidential Information
to any person or entity. Xxxxxxxx agrees to consult with the
Company prior to any use or disclosure of information if, at any
time, Xxxxxxxx has any question as to whether any particular
information is included within the meaning of "Confidential
Information" or whether Xxxxxxxx is free to disclose or use the
information. Xxxxxxxx shall immediately return to the Company
all Confidential Information he may have in his possession.
For purposes of this Agreement, the term "Confidential
Information" shall mean information that is not readily and
easily available to those in the Company's business and that
concerns the Company's prices, pricing methods, costs, profits,
profit margins, suppliers, manufacturing or processing methods,
procedures, tooling, fixtures, processes or combinations or
applications thereof developed in, by or for the Company's
business, research and development projects, data, goals, or
activities, business strategies, sales techniques, the identities
or addresses of Company employees or their functions, the course
of dealing between the Company and its customers or potential
customers of the Company, customer preferences, particular
contacts or locations of customers or potential customers,
negotiations with customers or potential customers, or any other
information concerning the Company or its business that is not
readily or easily available to those in the Company's business.
4. Noncompetition. From the date hereof until September
1, 1998, Xxxxxxxx shall not and shall not cause or permit any
company or entity directly or indirectly controlled by Xxxxxxxx
to directly or indirectly, either as principal, agent, employee,
owner (if the percentage of ownership exceeds 10% of the
ownership interest of the business), general or limited partner
(if the percentage of ownership exceeds 10% of the ownership
interest of the business), director, officer, consultant or in
any similar capacity, (i) engage or participate in any activity
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throughout the continental United States which is substantially
similar to the business of the Company, (ii) cause or encourage
any other person or entity to engage or participate in any
activity in the continental United States which is substantially
similar to the business of the Company, or (iii) attempt to
interfere with any business relationship between the Company and
any other person or entity, including, without limitation, its
employees and customers.
In the event that Xxxxxxxx enters a new business which does
not directly compete with the Company's actual or contemplated
business, the parties will negotiate in good faith to carve out
an exception to the foregoing to accommodate such business
venture.
5. Release. Xxxxxxxx, on behalf of himself, his agents,
assignees, attorneys, heirs, executors and administrators, fully
releases the Company, and its successors, assigns, parents,
subsidiaries, divisions, affiliates, officers, directors,
shareholders, employees, agents and representatives, from any and
all liability, claims, demands, actions, causes of action, suits,
grievances, debts, sums of money, controversies, agreements,
promises, damages, back and front pay, costs, expenses,
attorneys' fees, and remedies of any type which Xxxxxxxx now has
or hereafter may have by reason of any matter, cause, act or
omission arising out of or in connection with Xxxxxxxx'x
employment with or voluntary resignation from the Company,
including without limiting the generality of the foregoing,
claims, demands or actions under Title VII of the CiVil Rights
Act of 1964, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Civil Rights Act of 1966, the
Americans' With Disabilities Act of 1990, or any other federal,
state or local statute or regulation regarding employment,
discrimination in employment, or the cessation of his employment,
and the common law of any state.
6. Severability. If any provision of this Agreement or the
application thereof is held to be invalid, such invalidity shall
not affect other provisions of this Agreement which provisions
shall be given full effect without the invalid provisions, and to
this end the provisions of this Agreement are declared to be
severable.
7. Entire Aqreement. This Agreement, together with all
attachments hereto, sets forth all of the agreements, conditions
and understandings between the parties hereto with respect to the
subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, express or
implied, oral or written, with respect thereto, except as
provided herein. Moreover, no waiver by any party of any
condition, or of the breach of any term, covenant, representation
or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed or
construed as a further or continuing waiver of any such condition
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or breach or a waiver of any other condition or of the breach of
any other term, covenant, representation or warranty set forth in
this Agreement.
8. Injunctive Relief, Riqhts and Remedies. The parties
agree that the remedy at law for any breach by either party of
his/its obligations hereunder will be inadequate and that the
aggrieved party shall be entitled to such injunctive relief as a
court of competent jurisdiction may prescribe. These rights and
remedies are in addition to those provided by common or statutory
law.
9. Applicable Law and Jurisdiction. This Agreement shall
be construed and governed by and according to the laws of the
State of South Carolina. The parties hereby submit to the
jurisdiction of the Court of Common Pleas for Greenville County,
South Carolina with respect to any dispute arising under this
Agreement.
10. Headings. The headings contained herein are inserted
for reference purposes only and are not intended to have any
substantive meaning or interpretive purpose.
IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the date first set forth above.
Witness: /s/ Xxxxxxx Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
SPAN-AMERICA MEDICAL SYSTEMS, INC.
Witness: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
Title: President
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